Average Prices Up in BK, Inventory Down
Looks like the law of supply and demand is at work in Brooklyn. According to a market trend report from Trulia, the average listing price of Brooklyn homes rose 1.4% between September 24 and October 1, from $691,857 to $701,779. The number of listings, however, went down from about 4,725 to about 4,625. Think folks…
Looks like the law of supply and demand is at work in Brooklyn. According to a market trend report from Trulia, the average listing price of Brooklyn homes rose 1.4% between September 24 and October 1, from $691,857 to $701,779. The number of listings, however, went down from about 4,725 to about 4,625. Think folks are holding off releasing units until the credit crisis wanes? We thought prices were starting to come down…
I hope it happens as you say lechacal. My recent experience in my home search is just as the article said. Many people have not come down on price and houses are few and far between. And I’m not looking in a “prime” area,
Asking prices are currently irrelevant.
As I have pointed out many times, the top of any asset bubble is typically characterized by decreasing supply and barely increasing prices. Prices start to decline, and some sellers hold out thinking things will get better. They don’t. Prices decrease some more, and the weakest sellers give in. Inventory increases, sales volume increases and prices decrease. The cycle continues until everyone who thought that holding out was a good idea kicks themselves for not selling at a mere 15% discount when they had the chance. Sellers capitulate. The market bottoms.
This will take several years to happen here. If anyone wants to start reading the posts that the sebbs of the world will be posting over the various stages of price declines, I can pretty much cut and paste from any other bubble collapses over the years. Every bubble is different in some way, but the psychology is always the same. The process is painfully predictable.
these guys can say whatever they want.
anyone who is willing to pay the same amount for the same brownstone today as they would have before the financial crisis ought to have their head examined.
and anyone sticking to the same asking price doesn’t really want to sell their house
in our little brownstone world, there is some protection due to the very restricted supply of renovated homes in “prime” areas and the consistent high demand for same. as the fallout from the crisis extends, this supply will loosen and demand will fall, but it’s hard to say by how much. i think the real drop, if it happens, will be if prices on large condos drop so significantly that people who previously were in the brownstone market exclusively will start seeing condos as substitutes.
don’t all the major brokers come out with quarterly reports on the market? it will be interesting to see what they say about the brooklyn brownstone market. or maybe someone with a lot of time on his hands can do an independent survey of recent closing prices.
miss muffett, this time i agree with you. 🙂 while the trulia data is mildly interesting, at the end of the day the only way to measure the market is to look at the most current closing prices.
“We thought prices were starting to come down…”
You thought right. Don’t fall for the spin.
In other words… If supply is restricted, ceteris paribus, then the price will rise.
There is no such thing as Ceteris Paribus in the NYC housing market… the best things we have is breaking up the market into tiny microcosms of “comps” in a given tiny 4-block radius… actually 4-blocks might be too large.
The only thing equal in NYC housing is that ALL prices are unsustainably high and will come down. The high-luxury places, of course, less so. The prices for luxury goods and services are very “elastic.” It’s all basic microeconomics.
A few points:
1) Listing prices are not nearly as meaningful as closing prices so to really determine market direction, we should look at closing prices. For all we know, the sellers represented in this sample listed even higher since they were factoring in that buyers would want a steeper discount off of the ask.
2) As this blog has shown, closing prices are coming down on lots of properties, and in many cases, asking prices are being cut too to “move the merch”.
3) Yes, I think many people, buyers and sellers, are watching the financial crisis and figuring out how to respond, so for sellers, that may mean holding off on putting properties on the market (though if they are waiting to “turn the page” on this crisis a la McCain, they may have a long wait).
4) It’s true that low inventory has been Brooklyn’s saving grace thus far, and has prevented prices from collapsing. As long as inventory stays low, prices may remain at pretty high levels, though there is pretty universal consensus that given what’s going on in the economy and Wall Street, NYC real estate will take some kind of a hit – the only unknowns are how big, how long, and when that hit will be.
5) The financial sh*t only truly hit the fan a few weeks ago, and it’s possible that these kinds of graphs/studies will look very different starting in Oct/Nov of this year…
yeah, if the edge of one prospect park puts a bunch of new upper-floor units on the market, the average goes up. it’s apples and oranges.